Grayson Inc

question 121

Multiple Choice

Grayson Inc. has provided the following data for the month of October. The balance in the Finished Goods Inventory account at the beginning of the month was $49,000 and at the end of the month was $45,000. The cost of goods manufactured for the month was $226,000. The actual manufacturing overhead cost incurred was $74,000 and the manufacturing overhead cost applied to Work-in-Process was $70,000. The adjusted cost of goods sold that would appear on the income statement for October is:

• A) $226,000.
• B) $230,000.
• C) $222,000.
• D) $234,000.

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Definitions:

Overhead

The ongoing business expenses not directly attributed to creating a product or service.

Operating Profit

The profit earned from a firm's normal business operations, excluding deductions of taxes and interest.

Markdown

A reduction in the selling price of goods or services, often used as a sales strategy to encourage consumer purchases or to clear older stock.

Mark-up

The difference between the cost of a product or service and its selling price, expressed as a percentage of the cost.